Question

If Sheridan Company issues 7500 shares of $10 par value common stock for $375000, the account Paid-in Capital in Excess of Par Value will be credited for $75000. Common Stock will be credited for $75000. Cash will be debited for $300000. Paid-in Capital in Excess of Par Value will be credited for $375000.

Answer 1

Answer:

Common Stock will be credited for $75000

Explanation:

The journal entry to record the issuance of the common stock is shown below:

Cash Dr  $375,000

    To Common stock (7,500 shares × $10) $75,000

    To Additional paid in excess of par value - common stock $300,000

(Being the issuance of the common stock is recorded)

For recording this we debited the cash as it increased the assets and credited the common stock and additional capital as it increased the equity